FORM OF SERIES C PREFERRED STOCK EXCHANGE AGRMNT



 





Exhibit 10.14


[FORM OF]

SERIES A PREFERRED STOCK

EXCHANGE AGREEMENT




     THIS SERIES A PREFERRED STOCK EXCHANGE AGREEMENT (this “Agreement”), dated
as of August    , 2004, is by and between Transportation Technologies
Industries, Inc., a Delaware corporation (the “Company”), and each of the
holders of the Company’s Series A Preferred Stock listed on Schedule I hereto
(each, a “Holder” and collectively, the “Holders”).



W I T N E S S E T H :




     WHEREAS,
on August [17], 2004, the Company will issue an aggregate of [     ]
shares of its common stock, par value $0.01 per share (the “Common
Shares”), in an initial public offering (the “IPO”);



     WHEREAS, each Holder owns the number of shares of Series A Preferred Stock
of the Company set forth opposite its name on Schedule I hereto (the “Preferred
Shares”), in each case representing the aggregate liquidation preference
applicable to each Holder’s Preferred Shares, which shall be determined in
accordance with the Certificate of Designations for the Preferred Shares and
the stockholders’ agreement (as amended) of the Company (the “Exchange Value”);



     WHEREAS, substantially concurrently with the consummation of the IPO and
following the 100,000-for-one reverse split of the Common Shares, each Holder
and the Company has proposed to exchange such Holder’s Preferred Shares for the
number of the Common Shares obtained by dividing the Exchange Value of such
Holder’s Preferred Shares by the price at which the Common Shares are offered
to the public pursuant to the IPO (the “IPO Price”) (such number of Common
Shares, the “Exchange Amount”); and



     WHEREAS, the parties intend each of the exchanges to be effected
hereunder to qualify
as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended (a “Recapitalization”).



     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and promises herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:



     1. Exchange.



     1.1 Exchange. Each Holder shall acquire from the
Company at the Closing (as de
fined below), and the Company shall issue and deliver to each Holder, upon the
terms and subject to the conditions set forth in this Agreement, the number of
Common Shares equal to the Exchange Amount applicable to such Holder in
exchange for the number of Preferred Shares owned by such Holder, issuable upon
the date of the Closing. Each Holder shall grant, convey, transfer and deliver
to the Company, upon the terms and subject to the conditions set forth in this
Agreement, all right, title and interest in and to such Holder’s Preferred
Shares as of the date of the Closing.



     1.1. Sole Consideration. The sole consideration to be issued by the
Company to each Holder in exchange for each Holder’s Preferred Shares is the
number of Common Shares equal to the Exchange Amount; provided the Company
shall not be required to issue fractions of Common Shares upon



 









 







exchange of each Holder’s Preferred Shares and each Holder shall not be
entitled to receive any consideration whatsoever in respect of any such
fractions of Common Shares otherwise issuable.



     1.2. Plan of Reorganization. This Agreement constitutes a “plan of
reorganization” within the meaning of Treasury Regulation Section 1.368-2(g).
Unless otherwise required by law (including the good faith resolution of an
audit), each party hereto shall treat each exchange of Preferred Shares for
Common Shares to which it is a party as a Recapitalization for all income tax
purposes.



     2. The Closing. The closing (the “Closing”) of the exchange of each
Holder’s Preferred Shares for Common Shares shall take place at the offices of
Cahill Gordon & Reindel LLP, located at 80 Pine Street, New York, New York
10005, or its designated agent, at 8:00 AM Eastern Standard Time on August
[17], 2004, or such later time and date as the Company and the Holders may
agree. At the Closing, the Company shall deliver to each Holder a certificate,
in the name of such Holder, evidencing the acquisition by such Holder of the
Common Shares issuable to such Holder. Simultaneously at the Closing, each
Holder shall deliver to the Company the Holder’s Preferred Shares, together
with any reasonably requested instruments of transfer duly endorsed in blank.
Each Holder understands that the Company intends to promptly deliver such
Holder’s Preferred Shares to the transfer agent for the Preferred Shares (the
“Transfer Agent”) for cancellation. Accordingly, each Holder agrees to deliver
to the Company promptly upon request, at or after the Closing, any and all such
instruments and documents relating to the aforementioned transfer as the
Company or the Transfer Agent may reasonably request to facilitate the
cancellation of such Preferred Shares.



     3. Representations and Warranties of the Company. The Company represents
and warrants to each Holder as follows:



     3.1. Organization. The Company is a corporation duly incorporated and
validly existing as a corporation and is in good standing under the laws of the
State of Delaware. The Company has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.



     3.2. Due Authorization, Execution and Delivery. The Company has duly
authorized, executed and delivered this Agreement. This Agreement constitutes
a valid, binding and enforceable agreement of the Company, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).



     3.3. No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations or defaults that would not have or be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect (as
defined below) on the consummation of the transactions contemplated herein, nor
will such actions result in any violation of the provisions of the charter or
bylaws of the Company or any of its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for those which have already been obtained, no
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required



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for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.



     3.4. Due Authorization and Issuance. The Common Shares, upon issuance by
the Company following receipt of the consideration provided for herein and
satisfaction of the other conditions set forth herein, will be duly and validly
authorized and issued, fully paid and non-assessable, will have been issued in
compliance with all federal and state securities laws and will not have been
issued in violation of any preemptive right, resale right, right of first
refusal or similar right.



     4. Representations and Warranties of each Holder. Each Holder represents
and warrants to the Company as follows:



     4.1. Organization. Each Holder, to the extent applicable, is an entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation. Each Holder has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.



     4.2. Due Authorization, Execution and Delivery. Each Holder has duly
authorized, executed and delivered this Agreement. This Agreement constitutes
a valid, binding and enforceable agreement of each Holder, except as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).



     4.3. No Conflicts. The execution, delivery and performance of this
Agreement by each Holder and the consummation of the transactions contemplated
hereby will not result in, as applicable, any violation of the provisions of
the charter or bylaws of any Holder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Holder or any of its properties or assets; and except for those which have
already been obtained, no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by any
Holder and the consummation of the transactions contemplated hereby.



     4.4. Ownership. Each Holder is the sole beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of such
Holder’s Preferred Shares, free and clear of any preemptive rights or any
liens, claims, security interests or other encumbrances of any kind or nature
whatsoever (“Encumbrances”) and has the complete power to transfer and deliver
such Holder’s Preferred Shares to the Company as contemplated by this
Agreement, free and clear of Encumbrances. Upon transfer to the Company by
each Holder of each Holder’s Preferred Shares, the Company will have good and
marketable title to each Holder’s Preferred Shares, free and clear of all
Encumbrances.



     4.5. Investment Decision; Subsequent Transactions. Each Holder is a
sophisticated investor with substantial assets under management and substantial
experience in making investment decisions in securities such as the Preferred
Shares and the Common Shares, and in transactions such as the exchange of the
Holders’ Preferred Shares for Common Shares of the Company as contemplated by
this Agreement. Each Holder is fully capable of bearing the economic
consequences of the transactions contemplated by this Agreement. Each Holder
understands that, prior to the consummation of the IPO, the Common Shares are
not traded on any National Securities Exchange nor on the NASDAQ National
Market and are likely to be highly illiquid, particularly as measured against
the number of Common Shares each Holder is acquiring hereby, and volatile. In
making its decision to enter into this Agreement, each Holder has relied on its
own examination of the Company, including, but not limited to, all information



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relating to the Company filed with the U.S. Securities and Exchange
Commission. Each Holder has had an opportunity to make inquiries of the
Company in connection with this Agreement and has done so to its satisfaction.
The Company has not made any representations to any of the Holders other than
those expressly set forth in this Agreement. The Holders further understand
that the Company may, from time to time, enter into transactions with other
holders of capital stock, as a whole or individually, that may involve
exchanges of amounts of cash, securities or other property that the Holders may
consider more attractive than the Common Shares being acquired by each Holder
in exchange for such Holder’s Preferred Shares, and that following execution of
this Agreement, the Holders shall have no right whatsoever to seek any
adjustment or modification to the consideration afforded to the Holders
hereunder or to otherwise “unwind” the transactions contemplated by this
Agreement. The Holders acknowledge that the Company has no obligation
whatsoever to make any future transaction relating to capital stock available
to the Holders on any basis whatsoever.



     5. No Registration. Each Holder understands that the exchange of Common
Shares for such Holder’s Preferred Shares hereby is intended to be exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
3(a)(9) and Section 4(2) thereunder. In this regard, each Holder represents
that it has not provided any item of value to any person other than the
Holder’s Preferred Shares provided to the Company in connection with the
transactions contemplated by this Agreement.



     6. Conditions. The obligations of the Company and the Holders hereunder
to exchange the Holders’ Preferred Shares for Common Shares at the Closing are
subject to the following conditions:



     6.1. Completion of the Reverse Stock Split. The 100,000-for-one reverse
split of the Common Shares shall have been completed prior to the cancellation
of the Series D Preferred Stock and prior to the exchanges of both the Series A
Preferred Stock and the Series C Preferred Stock for Common Shares.



     6.2. Cancellation of Series D Preferred Stock and Exchange of Series C
Preferred Stock. The Company shall have completed the cancellation of its
Series D Preferred Stock prior to the exchange contemplated by this Agreement,
and shall have completed the exchange of its Series C Preferred Stock for
approximately 641,619 sharesa of the Common Shares simultaneously with the
exchange contemplated by this Agreement.



     6.3. Use of Proceeds. The Company shall have obtained the additional
amendment and waivers under its existing credit facilities described under the
“Description of Certain Indebtedness” section of the Company’s Registration
Statement, File number 333-115156, as amended, which are necessary to the
consummation of the exchange contemplated by this Agreement.



     6.4. Accuracy of Representation and Warranties. The representations and
warranties made by the Company and the Holders in connection with this
Agreement shall be true and correct in all material respects on and as of the
Closing.











	a	 	This number of shares is subject to change based upon the final valuation of
the shares.





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     6.5. No Challenges. No action or event shall have occurred or been
threatened, no action shall have been taken, and no statute, rule, regulation,
judgment, order, stay, decree or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to the exchange of the Common
Shares for each Holder’s Preferred Shares, by or before any court or
governmental regulatory or administrative agency, authority or tribunal, in the
Company’s reasonable judgment, could materially adversely affect the Company’s
business, condition (financial or otherwise), income, operations, properties,
assets, liabilities or prospects and that of the Company’s subsidiaries, taken
as a whole, or materially impair the contemplated benefits to the Company of
the transactions contemplated hereby.



     6.6. Waiver of Conditions. Notwithstanding any other provisions of this
Agreement, the Company, to the extent permitted by law, may waive any or all of
the conditions contained herein; provided, however, that in no event shall the
Company be required to consummate the transactions contemplated hereby in such
circumstance.



     7. Other Provisions.



     7.1. Effectiveness of this Agreement. This Agreement and the exchange
contemplated hereby will take effect immediately prior to the consummation of the IPO.



     7.2. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered or sent by mail, telex or
facsimile transmission as follows:





	 	(i)	 	if to the Company, to:

Transportation Technologies Industries, Inc.

980 North Michigan Avenue, Suite 1000

Chicago, IL 60611

Attention: General Counsel

Facsimile: (312) 280-4820

	 
	 	 	 	With a copy to:
	 
	 	 	 	Cahill Gordon & Reindel LLP

80 Pine Street

New York, NY 10005

Attention: Roger Meltzer, Esq.








	 	(ii)	 	if to a Holder, to:
	 
	 	 	 	c/o Transportation Technologies Industries, Inc.

980 North Michigan Avenue, Suite 1000

Chicago, IL 60611

Attention: General Counsel

Facsimile: (312) 280-4820






     7.3. Waivers and Amendments. This Agreement may be amended or modified,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right,



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power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.



     7.4. Further Assurances. Each of the parties hereto covenants and agrees
upon the request of the other, to do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged and delivered all such further acts, deeds,
documents, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary or desirable to give full effect to
this Agreement.



     7.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.



     7.6. Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.



     7.7. Binding Effect. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and the heirs, legal
representatives and successors of the parties hereto.



     7.8. Assignment. None of the parties hereto may assign any rights under
this Agreement and any such purported assignment of rights hereunder shall be
void.



     7.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.



     7.10. Third Party Beneficiaries. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give to any third
party any rights or remedies against any party hereto.



     7.11. Expenses. The Company will bear the costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.



     7.12. Entire Agreement. This Agreement constitutes the entire agreement
as among the parties with respect to the transactions contemplated hereby and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any such party.



     7.13. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.



     7.14. Definition of the Term “Material Adverse Effect”. For purposes of
this Agreement, the term “Material Adverse Effect” shall mean a material
adverse effect on the consolidated financial condition, results of operations,
stockholders’ equity, management, general affairs or business of the Company
and its subsidiaries, taken as a whole.



[Signature Pages Follow]




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     IN WITNESS WHEREOF, the Company and each Holder have executed this
Agreement as of the date first written above.


	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES

INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 









 





	 	 	 	 	 
	 	 	HOLDERS:
	 
	 	 	 	 
	 	 	TRANSPORTATION INVESTMENT PARTNERS, L.L.C.
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	CARAVELLE INVESTMENT FUND, L.L.C.
	 
	 	 	 	 
	

	 	By:
	 	Trimaran Advisors, L.L.C., its investment
manager and attorney-in-fact
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND, L.P.
	 
	 	 	 	 
	

	 	By:
	 	Albion Alliance LLC, its general partner
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ALBION ALLIANCE MEZZANINE FUND II, L.P.
	 
	 	 	 	 
	

	 	By:
	 	AA MEZZ II GP, LLC, its general partner
	
	
	
	

	
	
	
	

	
	
	
	

	
	
	
	

	

	 	By:
	 	Albion Alliance LLC, its sole member
	 
	 	 	 	 
	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 







 









 





Schedule Ia



	 	 	 	 	 	 	 	 	 
	 	 	Number of Preferred	 	Number of Common
	 	 	Shares Being	 	Shares Being Received
	Name of Holder
	 	Exchanged by Holder
	 	by Holder

	Albion Alliance
	 	 	 	 	 	 	 	 
	Mezzanine Fund, L.P.
	 	 	[     ]	 	 	 	 	 
	Albion Alliance
	 	 	 	 	 	 	 	 
	Mezzanine Fund II,
	 	 	 	 	 	 	 	 
	L.P.
	 	 	[     ]	 	 	 	 	 
	Caravelle Investment
	 	 	 	 	 	 	 	 
	Fund, L.L.C.
	 	 	[     ]	 	 	 	 	 
	Transportation
	 	 	 	 	 	 	 	 
	Investment Partners,
	 	 	 	 	 	 	 	 
	L.L.C.
	 	 	[     ]	 	 	 	 	 
	Total:
	 	 	[     ]	 	 	 	 	 















	a	 	These numbers are to be filled in at the time of Pricing.